Vivo India transferred Rs 62,476 crore to China to avoid paying taxes: ED

According to the agency, 18 companies helped the smartphone maker to transfer 50 per cent of the turnover outside India, mainly China

The Enforcement Directorate’s (ED’s) money-laundering probe into mobile phone maker Vivo India has revealed the company, to avoid paying taxes in India, remitted about Rs 62,476 crore of its turnover to China between 2017 and 2021.

According to the agency, 18 companies that were allegedly incorporated fraudulently helped the smartphone maker to transfer 50 per cent of the turnover outside India, mainly China. The sale proceeds during the period stood at Rs 1.25 trillion.

So far, 119 bank accounts of entities with a gross balance of Rs 465 crore, including fixed deposits of Rs 66 crore of Vivo India, gold bars of 2 kg, and approximately Rs 73 lakh in cash, have been seized under the provisions of the Prevention of Money Laundering Act (PMLA), the agency said.

According to an official, Vivo India’s books showed losses in most of its associate firms while transferring money to China.

The findings have come after the agency had searched the premises of the smartphone maker and its 23 associate companies in 48 locations of the country early this week. Vivo India was incorporated in August 2014 as a subsidiary of Multi Accord Ltd, a Hong Kong-based company, and was registered in Delhi.

The investigation came after the Ministry of Corporate Affairs (MCA) had filed a police complaint against Vivo’s associate company Grand Prospect International Communication Pvt Ltd (GPICPL), its directors, shareholders, certifying professionals, etc.

It was alleged that GPICPL and its shareholders had used forged identification documents and false addresses at the time of incorporation.

“The allegations were found to be true as the investigation revealed that the addresses mentioned by the directors of GPICPL did not belong to them, as they had used government building, senior government official house addresses as address proof,” the ED said.

The ED also said the company was incorporated by Zhengshen Ou, Bin Lou and Zhang Jie with the help of chartered accountant Nitin Garg.  

The company’s directors fled the country. One director, Bin Lou, left India in April 2018. Two others, Zhengshen Ou and Zhang Jie, left India in 2021, according to officials. Bin Lou was a director of GPICPL also. He had incorporated multiple companies in the country spread across various states.

“A total of 18 companies has been incorporated just after Vivo has been set up in the year 2014-15. Later, another Chinese National Zhixin Wei had incorporated four more companies.

“The employees of Vivo India, including some Chinese nationals, did not cooperate with the search proceedings and had tried to abscond, remove and hide digital devices which were retrieved by the search teams,” the ED said.

Some associate entities are Rui Chuang Technologies (Ahmedabad), V Dream Technology & Communication (Hyderabad), Regenvo Mobile (Lucknow), Fangs Technology (Chennai), Weiwo Communication (Bengaluru), Bubugao Communication (Jaipur), Haicheng Mobile (India) (New Delhi), Joinmay Mumbai Electronics (Mumbai), and Yingjia Communication (Kolkata).

Meanwhile, the Chinese embassy in New Delhi has issued a statement saying multiple investigations by Indian enforcement agencies into Chinese companies are damaging the confidence of foreign entities investing and operating in the country.